Fund Profile

JPMorgan Global Growth & Income 18 February 2022

Disclaimer

This is a non-independent marketing communication commissioned by J.P. Morgan Asset Management. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

Overview
JGGI’s flexible approach to income investing has generated strong, sector-leading returns over a volatile 12 months…
Overview

JPMorgan Global Growth & Income (JGGI) offers investors a ‘core’ style of global equity investing. Its managers, Helge Skibeli, Rajesh Tanna and Timothy Woodhouse are freed of the confines of conventional equity-income investing, as the trust pays out 4% of its financial year-end NAV as a Dividend by tapping into both its revenue and capital. This means that the managers have the ability to navigate the market as they see appropriate, maximising total return rather than being hamstrung by the need to generate income.

The advantages of the team’s flexibility have been made apparent over recent months, whereby they have moved JGGI away from its previous ‘growth’ bias to a more ‘core’ style. This reflects the team’s current concerns around valuations, which they believe have become overly stretched in certain sectors. They have instead positioned JGGI into more modestly valued re-opening winners and have selected financial and semi-conductor stocks, as we describe in the Portfolio section.

The advantages of JGGI’s dividend structure are also demonstrated by its long-term Performance, whereby JGGI has easily outperformed global equity markets over the last five years, despite its high yield. JGGI also compares favourably to its peers, being the best performing trust over the last one and three years, with the managers having shown clear value-add to global equities. JGGI continues to trade on a premium, currently 3.6% and has largely done so since adopting its new mandate in 2016 (see Discount).

The most substantial change to JGGI over the last year is the forthcoming merger with Scottish Investment Trust (SCIN), with the JGGI team retaining their investment mandate. This will bring advantages to JGGI’s shareholders, thanks to the removal of JGGI’s performance fee and increased liquidity.

Analyst's View

We believe JGGI offers investors a potential ‘one-stop-shop’ solution for equity income investors. Thanks to the flexibility JGGI’s dividend profile offers, income investors need not worry about having to compromise on capital growth to achieve an attractive level of yield. This has not always been the case for more conventional equity-income strategies, as high-yielding stocks have long been associated with underperforming sectors. Given that JGGI’s return and income profile is only possible in the investment trust structure, investors may seldom find other similar strategies. Thanks to JGGI’s ability to pay dividends from capital, it can also offer a source of diversification to pre-existing income portfolios, as investors may find little commonality between JGGI’s holdings and those of other income strategies.

We are encouraged by the team’s active positioning over recent months, as they shifted the portfolio away from the more highly valued sectors before the recent market correction. We think the team’s willingness to adapt to different market environments makes it stand out against its peers. However, the main disadvantage of JGGI is that its dividend cannot be guaranteed to be progressive and may decline if its financial year-end falls on a down-market.

We view the merger between JGGI and SCIN as a huge benefit to JGGI’s existing shareholders, thanks to the increased liquidity and improved fee profile of the trust, with the merger of the two trusts under JGGI’s strategy acting as a vote of confidence for the approach.

bull bear
Has been able to successfully navigate recent market turmoil
Dividend cannot be guaranteed to be progressive
Offers equity income investors a good source of diversification
Slightly high volatility compared to peers and benchmark
Merger with SCIN will bring greater liquidity and the removal of JGGI’s performance fee
Currently trades at a premium to NAV
Continue to Portfolio
2022 Kepler Income & Growth Rated Fund

This trust has been awarded a rating by Kepler Trust Intelligence for income & growth... Find out more

Fund History

18 Feb 2022 Fund Analysis
JGGI’s flexible approach to income investing has generated strong, sector-leading returns over a volatile 12 months…
19 Jan 2022 Apples and pears
We examine the relationship between the demand for open- and closed-ended funds, and ask whether investor behaviour can be predicted...
22 Dec 2021 No humbug
Our analysts look back at a year of predictions, theories and ideas, and highlight those they think could matter most…
01 Oct 2021 Results analysis: JPMorgan Global Growth & Income
JGGI has generated strong outperformance over its 2021 financial year, effectively navigating the pandemic while still providing an attractive yield…
28 Jul 2021 How are the mighty fallen
Dividend culture as we knew it is dead, according to Kepler's David Johnson, but investment trusts offer a solution...
29 Jun 2021 Fund Analysis
JGGI is now the best-performing trust in the AIC’s Global Equity Income sector, thanks to its managers’ flexible approach to global equity investing…
05 Mar 2021 Results analysis: JPMorgan Global Growth & Income
JGGI is well positioned for the year ahead and offers useful diversification for income hungry investors...
20 Jan 2021 Kepler's top-rated investment trusts for 2021
We update our annual quantitative ratings for investment trusts…
19 Nov 2020 Fund Analysis
JGGI offers a differentiated solution to global equity income investing…
12 Mar 2020 The importance of buying earners*
Our analysis shows that the impact of dividend contributions on long term returns is anything but trivial...
03 Mar 2020 Fund Analysis
JGGI is an attractive option for income-hungry investors…
27 Feb 2020 Robbing Peter to pay Paul?
Two of our analysts discuss the growing trend for companies to pay an income out of capital…
01 Aug 2019 Fund Analysis
JPMorgan Global Growth & Income combines a strong track record of NAV growth with a robust yield...
View all

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